UPDATE 2-Adecco snaps up Japanese staffing firm VSN

Tue Jan 3, 2012 4:00am EST

Related Topics

* Buys VSN inc for 90 million euros ($116.8 million

* Buy to boost Adecco in Japanese professional staffing market

* Shares rise 3.3 pct, outperform European sector (Adds shares, analyst comment)

ZURICH, Jan 3 (Reuters) - Adecco, the world's biggest staffing group, said on Tuesday it would buy Japan-based VSN Inc for an enterprise value of 90 million euros ($116.8 million) to double its exposure to professional staffing services in the world's second-largest staffing market.

Adecco, which competes with Dutch group Randstad Holding NV and U.S.-based Manpower Inc, said it expected cost synergies of some 2 million euros from the deal.

"The deal makes sense from a strategic point of view and will add some 11 to 12 percent to Adecco Japan revenues, but less than 1 percent to group sales," Vontobel analyst Michael Foeth said in a note.

Tokyo-based VSN Inc generated revenue of 157 million euros in 2010 and is focused on the engineering sector, Adecco said. The deal is expected to close within the first half of 2012.

Adecco's general staffing business has continued to outpace its more lucrative professional staffing business in recent quarters, which has weighed on margins.

Combining the two companies should help double the group's exposure to the professional staffing market in Japan, which represents some 9 percent of Adecco's total revenue in that market, it said.

Adecco said the deal was being financed through existing cash.

Shares in Adecco hit a four-week high of 40.89 euros and were up 3.3 percent at 40.65 euros by 0858 GMT, against a 2.2 percent rise in the company's pan-European sector. ($1 = 0.7703 euros) (Reporting by Caroline Copley; Editing by David Cowell and David Holmes)

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